(K. Aleklett: The newspaper Sydsvenskan, Sweden, published this debate article on March 13 under, “Current Issues”. In May, Sweden will take over chairmanship of the Arctic Council for the period 2011-2014. Drilling for oil and natural gas will be an important issue during this period. The article is an attempt to highlight the issue to public debate.)

“The oil of the Arctic is not worth the risks”. The oil companys’ assert that it is necessary to drill for oil in deep water, including in the Arctic. But the oil reserves concerned are not greater than could be provided by a number of simple savings, writes Kjell Aleklett, Professor of Physics at Uppsala University, Sweden.

Carl-Henric Svanberg, the chairman of BP, delivered his speech and then left by the back door when the World Maritime University and International Maritime Organization held a conference in Malmö, Sweden, on the handling of risk and oil spills. In his speech Svanberg noted that one must drill in the deep ocean, including in the Arctic, to meet the future’s energy needs. His statement is, naturally, advertising for BP’s future activities. BP notes that “without new additions to production provided by deep-water drilling we have a restricted future in front of us”.

It is time to review BP and the other international oil companies and their contribution to global oil supply from deep water. From the catastrophe in the Gulf of Mexico (GOM) after the Deep Water Horizon rig exploded we know that BP operates there together with other international oil companies.

“Deep-water” begins at 500 metres. In total there are around 70 oilfields in the Gulf of Mexico that are at least this deep. The total production from these wells is 800,000 barrels of oil per day (b/d). BP’s flagship the Thunder Horse platform contributes about 250,000 b/d. They will maintain this maximum production for about 5 years and it will then begin to decline.

Mars-Ursa is the largest oilfield in the GOM. Production began in 1996, gave maximum production of 270,000 barrels per day from 2001 to 2004, and now production has dropped to 150 000 barrels a day. In a few years it will be finished. New oilfields in deep-water or in the Arctic will experience the same brief history. Those 800,000 b/d that today are produced in the Gulf of Mexico make up approximately 1 % of global production. The reality is that it would be fairly easy to do without all of this production.

When Carl-Henric Svanberg says that it is necessary to drill in deep water including in the Arctic he means that it is necessary for BP and the international oil companies, not for the world. During the 1960s when global oil consumption was around 10 billion barrels per annum (Gb/a) most of the world’s largest oilfields were discovered and we now know that this amounted to 56 Gb/a of discoveries. These numbers have, for many years, been a well-kept secret in the oil industry since general awareness of such huge reserves of oil would otherwise have led to a lower oil price.

In the annual report of an oil company it has always been most important to show that they can replace the oil that they produced that year with new reserves. During the entire 20th century it was simple to do with the help of the hidden reserves. Now it is no longer possible.

Last year ExxonMobil confessed for the first time that the company had not managed to replace all its produced reserves with an equal volume of oil, even though they purchased the reserves of other oil companies. BP also buys up other’s reserves, including in Russia, but if the company does not find any new oil in deep water they face red entries in their accounting of new reserves.

In an editorial of 7 March Sydsvensan discusses if BP will be made a scapegoat for the Gulf of Mexico catastrophe. The answer is, of course, yes. In the same way, we should make Shell face responsibility for the huge environmental destruction they have caused in the Niger Delta in Africa.

Our thirst for oil seems to be unquenchable but there will come a time when it cannot be quenched. Ten years ago, when the oil price was $20 per barrel (/b) I said that, in 2010, we would have problems with quenching our thirst. At that time the World Bank and leading economic institutes believed that the oil price in 2011 would still be $20/b.

It is always difficult to warn of events a long way in advance but sooner or later the reality arrives. The expression “peak oil” was coined by ASPO, the Association for the Study of Peak Oil and Gas, ten years ago and today it is on many people’s lips. On 4 March it was the lips of Shell’s managing director Peter Vosers who said; “One day we will face a situation where production does not satisfy demand.” That means we have reached peak oil.

BP has recently presented a future scenario to 2030 in which there is no shortage of oil. Instead, oil production is continuously increasing. It is time for even Carl-Henric Svanberg, the chairman of BP, to recognize reality.

Kjell Aleklett is President of ASPO International .You can discuss at Aleklett's Energy Mix: aleklett.wordpress.com

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